MORESCO Corporation
MORESCO Group delivers sustainable one-of-a-kind products

The 66th 1Q Financial Report（ From March 1, 2023 to May 31, 2023 ）Tokyo Stock Exchange Prime Market 5018 (Petroleum and Coal Products)
July 2023

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Current business environment– car production volumeChanges in the number of automobiles produced inareas where our bases are located

1,388

1,293

220

934

19-1Q

20-1Q
Japan

1,288

21-1Q
China

America

Unit: 10,000 units(Year-on-year %)1,349
241 (+9%)247

269 (+9%)648621 ( △4%)173219 ( +26%)

22-1Q

23-1Q

Southeast/South Asia

Source: Created in-house based on data published by MarkLines
Note 1: Aggregated data based on our fiscal year (Japan: March to May, Overseas: January to March)
Note 2: Southeast/South Asia counts only Thailand, Indonesia and India, which are our bases.

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Current business environment– Fluctuations in major raw material prices and standards
Dubai oil price$/b

Money order¥/$

120

150

110

140133.3 130

100

9080.780
70

120
110
100

60
5090

4080

3070

20-1Q

21-1Q

22-1Q

23-1Q
Domestic naphtha price

1,000 yen/kL

80

66.5

60
402020-1Q

21-1Q

22-1Q

23-1Q
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Consolidated income statement（Unit: million yen）

22/1Q

23/1Q

YoY

7,050

7,596

+7.7％

2,053

2,083

+1.5％

1,852

1,826

▲1.4％

Operating Income

201

257

+28.0％

Non-operating profit &loss

271138▲48.9％

Ordinary Income

471395▲16.1%

Income before Income Tax

471395▲16.1%Net Income *317224▲29.5%Net Sales
Gross Profit
Selling, General and
Administrative Expenses* Profit attributable to owners of parent, the same below

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Sales by division（Unit: million yen）

22/1Q

23/1Q

YoY

Functional Fluids Division

3,420

3,688

+7.8％

Hot Melt Adhesive Division

1,809

2,108+16.6％

Synthetic Lubricants Division

502

301

▲40.0％

Liquid Paraffin & Sulfonates
Division902

998+10.6％

Others417

500+20.1％

7,050

7,596

+7.7％

Total Net Sales

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Functional Fluids Division[Sales] 7.8% increase year on year (3,688 million yen)
[Sales volume] 7.3% decrease year on year

Unit: million yen
1,027

1,076
888
829

790
670

442 449266 267
186

Highvacuum
pump oil

Hydraulic Die casting
fluidlubricant

22/1Q

Cutting
Fluids218

Lubricantfor hot
forging

Others➢ Japan/China
Volume decreased due to theimpact of inventory adjustments atauto parts manufacturers.
➢ Southeast/South Asia/
North America
Volume increased due to theincrease in automobile production
volume.

23/1Q
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Hot Melt Adhesive Division[Sales] 16.6% Increased year on year (2,108 million yen)
[Sales volume] 9.2% Increased year on year

Unit: million yen➢ JapanSales of sanitary material applications
were firm.

1,574
1,240

➢ Abroad
Sales expanded in India and Indonesia
for sanitary material applications.
222

Sanitary

266

Adhesive
22/1Q

347

268

Others

23/1Q
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Liquid Paraffin & Sulfonates Division[Sales] 10.6% increase year on year (998 million yen)
[Sales volume] 12.2% decrease year on year

Unit: million yen

680➢ Liquid Paraffin
The volume of polystyrene plasticizer
applications decreased.

716

169

➢ Sulfonates
Exports covered the decline indomestic shipments due to inventory
adjustments at auto parts
manufacturers.

204
53

Liquid paraffin

Sulfonate
22/1Q

78

Others

23/1Q
8
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Synthetic Lubricants Division[Sales] 40.0% decrease year on year (301 million yen)
[Sales volume] 27.6% decrease year on year

Unit: million yen➢ High temperature
Sales declined due to inventory
adjustments by customers.

288

258
203

➢ Hard disk surface lubricant
Sales decreased due to the impact
of cooling data center investment.
30
12High temperature Hard disk surface
lubricating
lubricant

22/1Q

13

Others

23/1Q
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Sales and Gross Profit Margin Trends➢ The decline in the gross profit margin has come to a halt.
Unit : million yen
Sales

9,000

50.0%

Gross Profit

7,957 7,854
7,050

7,473

7,596

6,000

40.0%
34.9%

34.4%

33.1%

32.4%

31.6%

31.1%

3,000

29.8%
28.4%

30.0%

29.1%
26.6%

27.4%

27.0%

24.7%

0

20.0%

1Q2Q

3Q

FY2020

4Q

1Q

2Q

3Q

4Q

1Q

FY2021

2Q

3Q

FY2022

4Q

1Q
FY2023
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Profit and loss by segment
Unit : million yen

Japan
325
104

China

OperatingincomeExternal
sales

118

North America
4,968

48

28

21/1Q

854

22/1Q

670

14

4,537
21/1Q

830

35

4,738

113

22/1Q

1123/1Q

278

209

182

21/1Q

22/1Q

Southeast/South Asia
85

23/1Q

23/1Q

50

24

1,080

21/1Q

1,276

22/1Q

1,679

23/1Q

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FY2023 Consolidated Earnings Forecast➢ Assumptions for full-year forecasts
Crude oil price: $90/b

Unit : million yen

Exchange rate: $130/yen

23/1Q

Full-year forecast

Progress rate

Net Sales

7,596

34,50022.0％

Operating
Income

257

1,400

18.4％

Ordinary
Income

395

1,600

24.7%

Net Income

224

700

32.0%
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Realization of a
Sustainable Society

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Gas & Water Vapor Transmittance Measurement Device
Received the 73rd Industrial Technology Award
from the Osaka Industrial Research Association.

Single chamber typeAward ceremony

Multi-chamber type

[Reason for award] We developed a new measurement method (MA method*)and equipment, and were able to shorten the measurement time to 1/5 of theconventional method.
※Modified differential pressure method with an Attached support method
Current field of application

Target field

OLED, silicon solar cell, sensors,
semiconductors, electronic paper

Perovskite solar cells,
fuel cells, hydrogen tanks,
Food packaging, pharmaceutical packaging
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Efforts to decarbonize
Reduce GHG emissions from in-house energy consumption by 46％ by 2030 (compared to 2013)
Achievecarbon neutrality by 2050, including supply chain

GHG emissions Adjusting

Scope 3 target settings for release during this term

November 11, 2022
Expression of support

Changes in GHG Emissions of the MORESCO Group (Domestic)
Unit: t- CO2

10,906

7,240

2013 comparison
5,725(▲46％)

2013

2017

2018

2019

Scope1 direct discharge

2020

2021

2022

2030

Scope2 indirect emissions

2021

▲24％

2022*

▲33％

*The reduction rate for 2022 is a provisional
figure using the electric power emission factor
before finalization for the current fiscal year

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Initiatives for health management
Excellent Health and Productivity Management Organization(Large Enterprise Category)

Certified for 3 consecutive years*A system to honor corporations that practice particularly excellent health management(Ministry of Economy, Trade and Industry)

Health management

declaration
MORESCO believes that the physical and mental health of
its employees is essential for the sustainable developmentof the company. We will promote the health of ouremployees in order to realize "a company where

each and every person grows up in a richenvironment and creates new value."

StructureThe officer responsible for healthmanagement(The President and RepresentativeDirector)

The Director of Human
Resourcesindustrial physician

Human Resources
Department

Health insurance
association

Public Relations
Department

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Head Office / R&D Center

Kobe City

Kobe Airport➢ Forecasts, strategic goals and other forward-looking information in this presentation are basedon the judgements of MORESCO at the time this presentation was prepared. This information
may be revised without prior notice.
➢ Investors are cautioned not to rely entirely on the forecasts and goals in this presentation when
making investment decisions. MORESCO assumes no responsibility for any resulting losses.
➢ This presentation may not be copied or reused in any other way without the prior consent ofMORESCO.

https://www.moresco.co.jp/2023/7/20

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